‘We’d like to know what’s going on’

A member of the Fargo School Board committee that will review spending on a software conversion project said Friday that board members should have been better informed about changes to the project.

Don Faulkner sits on the planning committee that will conduct the review, prompted by board member John Strand’s concerns that the two-year project has grown by about $852,000 more than the $1.1 million originally budgeted.

Dan Huffman, the assistant superintendent of business services who led the conversion, said all of the spending was budgeted and welcomed the review.

“Ultimately, if they decide they want more detail or a different set of controls, I don’t have a problem with that,” he said.

Faulkner doesn’t dispute that the money was budgeted but said the timing of spending raises questions.

“Some of it got spent early, basically, and I don’t know that that’s a big issue, but I do think that there’s some concern that we probably should have been kept up on those changes,” he said.

In June 2008, the board approved slightly more than $1.1 million for the districtwide conversion to Microsoft Dynamics GP, one of two software packages proposed through a bidding process.

“But we knew as a staff that that was not going to be the total cost over the two years,” Huffman said.

Staff spent that following school year working long hours to get the first phase of the project ready to go live by July 1, 2009, he said.

In addition to the Microsoft software for finance, payroll and human resources functions, the district also installed an online tracking system for applicants, an upgraded system for calling substitutes and requesting leave, and an updated timekeeping system for hourly employees, Huffman said.

As he explained in a memo to the board, some components were installed earlier than planned in the two-year process for convenience and efficiency purposes.

Huffman said all of the changes were discussed at length by staff before being approved by the implementation committee, which he said consisted primarily of himself, district IT Director Bill Westrick, Accounting Director Jackie Gapp and Administrative Assistant Sheryl Lehman.

“I don’t think there’s anybody here who took the decisions to spend those dollars lightly,” he said.

But Strand said those changes, if they were related to the conversion project, should have come before the board for approval. District policy requires approval of any single, nonbudgeted purchase or expense of more than $25,000.

“That, to me, raises the question of how did this happen? Who authorized it? Was it according to policy? Do we want to keep doing business this way?” said Strand, whose request for an independent audit fell flat among other board members.

Of the additional $852,925 spent on the project, about $318,000 came from change orders as the additional software was implemented, according to a budget breakdown from Huffman.

Asked if the Planning Committee was kept abreast of those changes, Huffman said, “Not in any great detail.”

Also included in the amount was nearly $60,000 in travel expenses for staff from Sunergi, the Minneapolis-based Microsoft partner that helped the district through the conversion process. Sunergi has since folded, and the district is now working with a Wisconsin-based firm.

The amount also includes nearly $73,000 to increase the number of staff with system access from 35 to 60, $78,000 to upgrade the HR system, $103,395 for second-year software maintenance agreements, and $180,622 in additional software costs.

Most of the money to cover the conversion was included in the district’s budget line item titled “computer system services,” with a smaller amount in the “supplies” category of the budget.

The board also approved spending $500,000 in federal stimulus package funds on the project, as seen in a budget detail spreadsheet listing the expense as “GP Software Implementation.”

However, Strand said, “that doesn’t mean that when you approve a budget, it allows expenditures to happen without following other board policies” – in particular, purchasing rules that require a competitive bid process.

Faulkner said the Planning Committee will look at the issue more in depth. He wasn’t sure when it would report back to the board with its findings.

For board members, he said, it’s a balancing act between micromanaging and providing a direction and vision for the district.

“I’m always concerned when we get into the operational kinds of issues,” he said. “Obviously, we approve budgets and so on, and when we’re doing major work, yeah, we’d like to know what’s going on.”